Things Are Changing Fast
Union Budget has always been a lacklusture event for
those who have nothing to get from the frenzied rise or abnormal fall in
Sensex. How did Arun Jaitley’s 2017 adventure—or misadventure—evoked a 486 point gain in the Sensex is discussed by very few concerned people. That this balancing act—yearly accounting jugglery—is now a mere routine exercise can be judged from the merger of railway budget and general budget. Strangely enough, Union Finance Minister Arun Jaitley conciously evaded the issue of disastrous note ban while refusing to dwell on its adverse impact on the economy. Some politicians with the dubious distinction of being called fair weather birds, who solidly rallied behind Modi for his demonetisation drive, are now totally disappointed, if not disillusioned. And Bihar Chief Minister Nitish Kumar is one of them. The main opposition Congress Party’s line of budget-critical approach hovered around job or new job creation while the Left finished their ‘revolutionary’ duty by dubbing it anti-poor. The Congress Party, however, played with the gallery safely by describing the Jaitley show as a damp squib. More scathing criticism, however, came from the Bharatiya Janata Party (BJP) ally Shiv Sena as they questioned, and not quite unjustifiably, the very meaning of this year’s budget against the backdrop of last year’s unfulfilled announcements.
The CPM of Kerala unit however, made some legitimate criticisms about the Centre’s silence on how the states would be compensated when Goods and Services Tax (GST) comes into force. For all practical purposes the country would soon switch over to GST, more specifically from July 1, 2017 making some existing central levies obsolete. Those who are rejoicing the non-enhancement of service tax at the moment will feel the pinch of salt, hopefully in July. This year’s budget actually prepares the ground for GST roll-out.
Cooperatives didn’t figure in Jaitley’s budget. In truth the Centre simply ignored many pre-budget suggestions to boost cooperative movement, otherwise dangerously handicapped by demonetisation.
No doubt market forces were delighted for more than one reason. As there was no levy on capital gains, big business bosses heaved a sigh of relief. And much to their satifsaction tax exemption for indirect capital gains of foreign portfolio investments was assured without any ambignity.
With cash transactions of more than Rs 3 lakh banned, how the labour-intensive industries like tea, jute, construction etc. will fare in the future is anybody’s guess. Ironically people engaged in tea business don’t really know whether they are in agriculture or industry. That many tea gardens in North Bengal and elsewhere are to make payments of nearly 30 lakh in a week including wages and other statutory payments is a hard reality. No digital magic wand can make it cashless overnight. There is an emerging elite club that stands to gain enormously from digital India—and they are cheering and cheering. They think digital India would ultimately help narrow the economic imbalance between the rich and the poor. Only IT billionaries can sell this utopia. They say, and quite rightly, it is a digital economy budget. So they are too jubilant to shower praise on Jaitley. The PAYTM chief was not really out of mark when he said ‘there was digital theme in every area of budget’. To compund the problems faced by common people, the digital-bound budget has pushed the economy from cash-based to cash-less. Digitisation facilitates technological development, the secret increase in labour productivity, and that leads, through concomitant growth in automation, to future unemployment.
The saffron brigade is talking too much about agriculture and sops proposed in the budget, for farmers. It’s nice to talk about kisans—farmers—not farm suicides. Not that it is something unique for Jaitley to draw special attention to agriculture. But why they are hell bent on deliberately discouraging small-scale farming has remained unexplained. The idea of big farming, rather industrial agriculture, is gaining ground with every passing day at the cost of small peasants who are the torch-bearers of food security and sustainable agricultural development. Raising the allocation to MNREGA, the much publicised pro-poor programme that guarantees at least 100 days of work in villages, by 25 percent to Rs 48,000 crore, doesn’t mean much in view of mounting unemployment in rural India. Maybe, too much furore over ‘village rhetoric’ with a pro-farmer stance, has a special message to voters in seven states, including basically rural ones like Punjab and Uttar Pradesh this year. Then farmers are advised to depend on the rain god. As per Jaitley’s estimates, with a better monsoon, agriculture is expected to grow at 4.1 percent in the current year. This is after so much fire work in the area of irrigation and infrastructure.
People with NITI AAYOG, a BJP-government creation that replaced Planning Commission were over enthusiastic about the prospects of new job creation and they took the credit because Jaitley reportedly based on their outcome-based review of schemes and exercises, to formulate job strategy.
What is the missing link in Digital India is massive automation. Tall talks about revamping local manufacturing are rubbish. Manufacturing is actually vanishing and with Donald Trump in presidency in America it is protectionism that is regaining currency worldwide as France Presidential candidate Le Pen only the other day echoed ‘Trump’ with thunderous applause from her supporters. In other words Modi’s ‘Make in India’ slogan is a grand flop. After all India cannot create manufacturing jobs in isolation, it is intricately linked to global economy, particularly American economy.
Soldiers who are buried alive in avalanche in Kashmir, missed the chance to know that their government was going to modernise the overall defence sector by increasing budget outlay from Rs 78,000 crore to Rs 86,000 crore. But hawks are still reluctant to call it a defence-friendly budget, albeit India ranks fourth in the list of top 10 defence spenders in the world. They are concerned about how to import more costly and sophinticated weapons from the West and America because there lies the honey—cut-money. Also, they have no time to think over armymen who are punished for voicing dissent in social media and staging hunger strike to highlight bad quality and insufficient food and ill-treatment by superiors. Then it is how foot soldiers—more precisely cannon fodders—are being treated all over the world.
As for the political left their anti-budget noises subside even before the budget session proper starts in parliament. They raise relatively minor objections to some reforms proposals, not the fundamental ones that affect millions of people today—toilers in the informal sector, low-income people, so-called ‘middle-class’ people—who are living in despair. But they don’t matter much in budget-making exercise. People who matter, are not yet satisfied. They want more, more tax concessions as they demanded during their pre-budget discussions with the Finance Minister. And their voice will be heard in due season because their man Modi has promised to make ‘Indian Billionaries Great’.
Vol. 49, No.32, Feb 12 - 18, 2017